BT Money Hacks S1E258: Passive paycheck: Structuring your SME for predictable dividends
Mar 1, 2026
Grace Tay, associate director at finexis advisory who helps business owners with wealth and succession planning. She breaks down calculating true surplus after operational needs and risk. She outlines firewalls to protect personal wealth and ways to structure recurring revenue and distribution policies for steady dividends. Practical steps and limits to keep owners from overconcentrating their net worth.
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Three Step Extraction Formula
- Pay the business its oxygen, fund risk premiums, and budget growth, then extract the remaining free cash flow as true surplus.
- Grace Tay defines operating oxygen as 3–6 months of expenses, risk premiums for one-off shocks, and budgeted reinvestment before owner extraction.
Create Two Firewalls Around Personal Wealth
- Use two firewalls: incorporate as a private limited company and keep personal assets outside business structures.
- Consider an irrevocable trust set up early (five years in Singapore) and note limited liability fails if directors commit fraud.
Allocate 10–30 Percent To Alternatives
- Shift 10–30% into less liquid alternatives for wealth preservation once cash flow is stable and liquidity needs are met.
- Do due diligence on private managers because returns depend on manager skill; good private deals may lock liquidity for years.